The Tobacco and Primary Medical Services Bill will also outlaw cigarette vending machines and introduce a registration scheme for retailers.
The decision was attacked by Scottish Grocers' Federation chief executive John Drummond, who said the ban was "more likely to increase young people's fascination with tobacco".
He explained that there was no need for a display ban because other new and existing measures such as making it an offence for anyone under 18 to attempt to purchase tobacco and criminalising the proxy purchase of tobacco by adults would assist in creating a beneficial culture change.
"Combined with an increase in the legal age to purchase tobacco and measures to tackle the illegal trade, a display ban would be unnecessary," he said.
Trade bodies also accused Public Health Minister Shona Robison of misleading MSPs over the cost to retailers of enforcing the ban. In a written answer on January 13, Robison said the National Federation of Retail Newsagents (NFRN) had estimated the cost of gantry modification to be 'as little as £20'.
NFRN national president Suleman Khonat said: "The Minister has misquoted us. If the Scottish regulations follow the English regulations we anticipate the cost to be about £1,500."
Drummond fears costs will be "prohibitively expensive".